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A change in management is one of the trickiest times in the life of a public company. The messaging needs to be spotless and the business must be on an even keel to avoid losing the trust of the market.
Tip style
Value
Risk rating
Low
Timescale
Medium Term
Bull points
- Huge hedges in place to protect net interest income
- Plans to grow wealth and transaction businesses
- Scope to cut costs
- Generous dividends and buybacks
Bear points
- China and world trade are unpredictable
- Transformation has been sluggish in the past
HSBC’s (HSBA) boardroom handover has been a masterclass in effective expectation management and careful administrative groundwork. In April, chief executive Noel Quinn announced his retirement, and chief financial officer (CFO) Georges Elhedery was unveiled as his successor three months later. HSBC’s half-year results, which were published at the end of July, were reassuring in their detail and their outlook.